This is in response to your replacement letter of July 2, 1993,
submitted on behalf of your client bank. ("bank"). The bank has
its common stock listed on NASDAQ and is subject to section 16 of the
Securities Exchange Act of 1934, 15 U.S.C. §§ 78a-7811
(1988). You write to request the FDIC to concur in your view that
the amendment, which you have described, to your client bank's
non-qualified stock option program for non-officer directors
("director's plan") and its stock option and appreciation rights
plan ("employee's plan") (The two plans are sometimes referred to
as the "plans") does not require shareholder approval for a
certain exemption under our rules.

The plans have been approved by the bank's shareholders. The bank
would now like to amend the plans by board of director action. Rule
16b-3 of the SEC (12 CFR § 240.16b-3 (1992) is applicable as provided
by a cross-reference in § 335.410 of our regulations, 12 CFR
§ 335.410 (1993). We intend to follow controlling SEC
interpretations, which are brought to our attention.

Each plan contains a paragraph 5(g), which reads as follows:

(g) Recapitalization. Subject to any required
action by the stockholders, if any, the number of shares as to which
Options [and Stock Appreciation Rights have been or] may be granted
under this Plan, will be adjusted proportionately for any increase
or
decrease in the number of outstanding
Shares resulting from stock splits and reverse stock splits, but not
for stock dividends. The number of Shares will be adjusted to the
nearest whole Share. Any stock dividend resulting in an increase of
twenty percent (20%) or more in the outstanding Shares shall be deemed
a stock split.

The bank's board of directors intends to amend paragraph (g) of
each plan by adding the following sentence to the end of each
paragraph:

Anything herein to the contrary notwithstanding, the number of
Shares covered by outstanding Options [and Stock Appreciation Rights]
and the per share exercise price thereof shall be adjusted
proportionately for any increase or decrease in the number of
outstanding Shares resulting from stock splits, reverse stock splits
and stock dividends.

You indicate that the purpose and effect of the proposed amendment
is to require, in connection with stock splits, reverse stock splits,
and stock dividends, the proportionate anti-dilution adjustments
necessary to preserve the same economic benefits for the holders of
outstanding options after the stock split, reverse stock split, or
stock dividend, as the holders had before the event.

The proposed amendments will not increase the number of shares
issuable under either plan. As a result, the maximum number of shares
issuable under the director's plan (100,000 shares) and the employee's
plan (443,250 shares) will remain the same as originally approved by
the bank's shareholders.

As of the date of your letter, there are options to purchase 48,817
shares of the bank's common stock, granted and unexercised under the
director's plan. No stock appreciation rights have been granted to
date. Proportionate anti-dilution adjustments to these outstanding and
unexercised options, as a result of the proposed 5% stock dividend,
would increase the number of shares subject to the options by 2,441
under the directors' plan and by 15,232 under the employees' plan.
Since the total number of shares issuable under the plans will not
change as a result of the proposed 5% stock dividend, the number of
shares available for future option grants under the directors' plan
will decrease by 2,441 and the number of shares available for future
option or stock appreciation right grants under the employees' plan
will decrease by 15,232. The bank's board of directors also intends to
effect a proportionate anti-dilution reduction to the per share
(although not the total) exercise price of the outstanding and
unexercised options.

You state that the two proportionate anti-dilution adjustments
("adjustments") and the amendments to the plans have the effect
of preserving the existing value of the outstanding options. Absent the
adjustments and the amendments, you indicate that the optionees would
suffer an economic loss not experienced by shareholders receiving the
stock dividend. In your opinion, the amendment and the adjustments
would not materially increase the existing benefits of
optionees under the directors' plan or the employees' plan. You
emphasize that there would be no increase in benefits at
all. In your view, the adoption of the amendment is necessary to permit
the adjustments. You feel that the adjustments are necessary to
preserve the pre-stock dividend economic value of the outstanding
options.

You conclude that the proposed amendment to the plans and the
adjustments does not (i) increase the benefits to participants, (ii)
increase the number of securities issuable pursuant to the plans or
(iii) change in any way the participant eligibility requirements under
the plans. You also conclude that the bank's board of directors has the
power to adopt the proposed amendment to the plans without the
necessity of approval by the bank's shareholders.

Based upon the facts which you have presented, we feel that the
amendment and adjustments, which are described above, do not require
shareholder approval under 17 CFR § 240.16b-3 (1992) as applied to
your client by 12 CFR § 335.410 (1993). Because our position is based
upon the representations made to us in your letter, we note that any
different facts or conditions may require a different conclusion.

If you have any further questions, please write or call me at (202)
898-3723. My Fax number is (202) 898-3715.